MACAU - On the third floor of the City of Dreams casino in Macau, private VIP saloons for high rollers are named after iconic rivers in China such as the Huangpu in Shanghai.
Aptly so, since flowing water, in fengshui tradition, is believed to represent the flow of money.
But on a Monday afternoon, there is a discernible drought. Of the 12 luxuriously appointed rooms, nine are empty. In the remaining three, fewer than half the gaming tables are taken up, with a handful of players murmuring "gen" (the Mandarin term for "call").
The subdued scene at the Melco Crown Entertainment outfit is an indication that Macau's gaming industry is likely to see its worst- performing year in a decade since the industry was liberalised. There are now 35 casinos under six operators in the city.
Gaming revenues in the fourth quarter are headed for what analysts believe will be a 20 per cent plunge year on year, with estimates that the entire 2014 will see a fall or at most minimal growth from last year's US$45 billion (S$59 billion).
Casting a further pall is Chinese President Xi Jinping's visit here as part of the 15th-anniversary celebrations of Macau's handover from Portugal to China.
Recent weeks have seen Chinese officials issue warnings about the need for Macau to diversify its economy beyond the gaming industry, which is now providing for more than two-thirds of the local government's revenues.
It is hardly down in the dumps - it is still streets ahead of Las Vegas and Singapore, making seven times their respective chips last year.
But 2014 has been - as Bloomberg Intelligence analyst Tim Craighead puts it - a year of "death by a thousand cuts" for the People's Republic of Casinos, which has boomed from being the only place in China where gambling is legal.
These "cuts" range from the tightening of transit visa conditions for mainland Chinese, who can no longer go through Hong Kong, to a junket embezzlement scandal in May.
There are also tough year-on-year comparisons, given that last year saw dizzying heights of growth for the industry.
But the deepest cut of all has been the anti-corruption campaign waged by Mr Xi.
While tigers and flies alike are being nabbed, with the fattest cat skinned to date being former Chinese security czar Zhou Yongkang, the effects are spreading to the playground of rich Chinese.
Tellingly, the VIP segment has borne the brunt, seeing its takings decline by 19.6 per cent in the third quarter, notes Mr Craighead. This is even as the mass segment held up, growing 15.1 per cent, though that is also a slowdown from earlier.
Interviews with industry players indicate that the impact, which started to be significantly felt around the middle of this year, has been twofold.
First is the psychological effect of such a prominent campaign.
"People are afraid of being spotted and want to stay low-profile, so they have reduced the number of their trips," says a top executive at a casino operator who spoke on condition of anonymity.
While the spotlight of the anti- corruption campaign has been on officials, they do not form the bulk of visitors as they need official approval to enter Macau. "The only way they can come is by using fake passports," says the executive.
What has been more damaging is the impact on businessmen - those working for state-owned enterprises or the private sector - who cut deals with the government. So the stream of VIP customers from industries such as real estate, mining and construction has essentially dried up, says the executive, citing as an example those from a group of firms from Sichuan province - Zhou's former power base.
Gaming analyst Ben Lee of IGamiX estimates that VIP gamblers who used to visit Macau six times a year now halve the frequency - "to reduce visibility".
Meanwhile, for those who still come, bet sizes are shrinking. A Morgan Stanley report says VIP check-in amounts have "dropped significantly, from HK$20 million (S$3.4 million) to HK$30 million, to HK$3 million to HK$5 million a customer".
Second, beyond clients staying away, rules have been tightened. A key way has been by turning the screw on junket operators, which bring in VIP clients for a commission, extend credit and collect their debts.
The junket system has also been a way for wealthy Chinese to shift money out of the mainland, circumventing capital controls.
But from Oct 15, the Macau authorities started requiring junket operators to reveal their sources of funds, says the casino executive. By thus training a light on the process, a trade that thrives on secrecy has been affected.
The South China Morning Post said last week that Beijing's Ministry of Public Security will lead a major crackdown on the operators.
This comes after earlier attempts to squeeze the illicit flow of money via China's UnionPay banking card network.
A common practice of the Chinese is to go to the many luxury watch shops in the casinos to "buy" items via UnionPay, and then, for a service fee, pawn the items back for cash.
A check at the casinos found that a number of watch shops on the premises are now shuttered.
So how is the industry coping?
Many casino operators are trying to shift some of their VIP business to the mass market. For instance, SJM Holdings, which owns the most casinos in Macau, has said it is shifting 20 tables from the VIP category and targeting "premium mass-market" gamblers instead.
Others, such as Sands, are focusing on the lower-end mass market.
Such tactics also allow high rollers to stay under the radar for a longer period, says Morgan Stanley. "They are also probably lower- key in how they travel about, instead of being ferried around in helicopters and Ferraris," says Mr Craighead.
Meanwhile, junket operators are spreading their wings, looking for alternative opportunities in places like Vietnam, notes Mr Lee.
But the official numbers tell just one side of the story.
Side betting - an under-the-table arrangement between a gambler and a junket operator where every dollar bet on a table represents as much as 20 times more - has long thrived in Macau, says an analyst who declined to be named.
He says junket operators have told him that side betting is estimated to be two or three times the formal volume on the table. This has now come to a virtual halt because of a collapse in investor confidence after the junket scandal.
Whatever the numbers, it is clear Beijing's eye is on Macau.
Besides the anti-graft crackdown, another issue is China's economic considerations, says Mr Steve Vickers, chief executive of risk consultancy SVA.
"Everything that occurs in Macau with regard to gaming is basically 'permitted to happen' by Beijing", including its acquiescence to the violation of its currency limits, he says.
This serves Beijing's fiscal needs as it is a channel to mop up excess liquidity from what was until recently a red-hot Chinese economy.
But as the economy slows and China looks at internationalising the yuan, it has started to reassess how much liquidity should be released, says Mr Vickers.
The latest report by United States-based Global Financial Integrity says China haemorrhaged US$1.25 trillion between 2003 and 2012 because of illegal outflows.
What all this adds up to is a bit of a roller-coaster ride for Macau in the days to come. As Mr Vickers puts it: "The Macau gaming sector has entered a potentially turbulent and uncertain phase."
This article was first published on December 21, 2014. Get a copy of The Straits Times or go to straitstimes.com for more stories.